German drugs and crop chemicals group Bayer has offered to buy U.S. seeds company Monsanto for $62 billion in cash, defying criticism from some of its own shareholders in a bid to grab the top spot in a fast-consolidating farm supplies industry.

The unsolicited proposal, which includes debt, would be the largest foreign takeover by a German company if accepted.

The move, which would eclipse a planned combination of Dow Chemical and DuPont’s agriculture units, comes just three weeks after Werner Baumann took over as Bayer CEO, and was condemned by a major shareholder as “arrogant empire-building” when news of the proposal emerged last week.

Giving details for the first time, Bayer said on Monday it would offer $122 per share, a 37 percent premium to Monsanto’s stock price before rumors of a bid surfaced.

“We fully expect a positive answer of the Monsanto board of directors,” Baumann told reporters on a conference call, describing criticism from some investors as “an uneducated reaction in the media” when deal terms were not yet known, and driven by an element of surprise.

Monsanto, which said last week it had a received an approach from Bayer but gave no details, has yet to comment on the offer. The U.S. company’s shares jumped 9.5 percent to $111.17 in pre-market trading.

“Upper Limit”

Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes and also due to the growing convergence between seeds and pesticides markets.

ChemChina is buying Switzerland’s Syngenta for $43 billion after Syngenta rejected a bid from Monsanto, while Dow and DuPont are forging a $130 billion business.

With German rival BASF also looking into a possible tie-up with Monsanto, Bayer has moved to avoid being left behind.

Baumann rejected suggestions from some investors that Bayer should instead try to forge a joint venture with Monsanto, saying this would have tax disadvantages.

Sources close to the matter have said BASF is unlikely to start a bidding war with Bayer. BASF declined to comment on Monday. But analysts say Bayer might still have to pay more to persuade Monsanto and its shareholders to sell up.

That could be a problem, with some saying Bayer’s proposal, at 15.8 times its earnings before interest, tax, depreciation and amortization for the year ended Feb. 29, is already a stretch for the German company.

“The price that has now been disclosed is at the upper limit and it is just about economical. Should it rise further, which is to be assumed, the takeover will become increasingly unattractive,” said Markus Manns, a fund manager at Union Investment, Bayer’s 14th biggest investor.

Shares in Bayer, which had already fallen 14 percent since rumors of a bid emerged last week, dropped as much as 3.6 percent on Monday to a new 2-1/2 year low of 86.3 euros.

“Very Ambitious”

Bayer said it would finance the bid with a combination of debt and equity, primarily a share sale to existing investors. Equity would account for about a quarter of the deal value.

Equinet analyst Marietta Miemietz, who has a ‘buy’ rating on Bayer stock, said the extra debt appeared manageable but could limit Bayer’s ability to invest in its healthcare business, which some analysts think needs a boost to its drugs pipeline.

Baumann said Bayer would continue to develop its healthcare arm, which includes stroke prevention pill Xarelto and aspirin, the painkiller it invented more than a century ago.

“We are not feeding Peter by starving Paul here,” he said, adding no asset sales were planned to help pay for the deal.

Bayer also forecast synergies from a deal with Monsanto would boost annual earnings by around $1.5 billion after three years, plus additional future benefits from integrated product offerings – a reference to its push to combine the development and sale of seeds and crop protection chemicals.

Berenberg analysts, who have a ‘buy’ rating on Bayer shares, described the synergies estimate as “very ambitious.”

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Crop Fertility Specialists, (CFS) is a Northern Indiana crop input retailer originating more than 50 years ago. The company is committed to providing leading technology, products, and services in their corn and soybean markets to maximize returns for their customers.